Federal Student Loan Forgiveness Options May Also Offer Lower Monthly Payments Through Repayment Programs

Programs for federal student loan forgiveness offer the opportunity for certain graduates to have their college loan debts forgiven after a set period of time in repayment. Obviously, this is beneficial for those who have a high amount of student loan debt as, in the case of public service employees, they may only have to meet repayment requirements for around 10 years, which is a substantially smaller amount of time in repayment than other graduates who may have student loan debt upon graduation.

However, there have been problems, thanks to factors like the slow job market, which has made meeting monthly payment requirements on student loan debt difficult for individuals who may qualify for these forgiveness options. However, there are opportunities which have been made available for graduates who qualify for federal student loan forgiveness to also enroll in a repayment program that allows them to lower the minimum monthly amount they must pay toward their student loan debt.

Graduates who qualify for public service loan forgiveness are required to be in a particular Direct Loans repayment plan, which opens opportunities for more affordable monthly payments. A standard repayment plan may be too costly for some graduates, but income-based repayment plans or income contingent repayment plans are also options which these graduates may use as a way to not only find affordability in their monthly student loan debt repayment obligations but also set themselves on a path to forgiveness of their student loan debt.

Typically, loans which may qualify for these forgiveness options are typically Stafford loans, direct PLUS loans, and federal consolidation loans. For students who qualify, they will make 120 payments on their student loan debt and, upon meeting these terms, will have the remainder of their debt forgiven.

Also, options like the income-based repayment plan will cap the amount that a graduate must pay towards their student loan debt, in relation to their income, which can be more affordable for those who are not in a financial position to meet a standard student loan repayment. While public service employees may be able to have their debt forgiven after 10 years, under certain plans and when qualifications are met, traditional graduates who may not be in a public service field could have their debt forgiven after 25 years of repayment.

However, the student loan situation of each graduate is different, so talking with a lender or student loan servicer, like Direct Loans, is necessary to see what forgiveness and repayment plans may be available. Obviously, some students may have a mixture of private and federal debt, which cannot be consolidated under a federal consolidation loan, but others may be able to simply meet their student loan repayment separately without consolidation or entering into a specific plan, and quickly erase their student loan obligations. It’s for this reason, that financial aid counselors and student loan servicers often advise that graduates look at options when it comes to student loan repayment so that they can find the most affordable plan for their situation and allow them to get out of debt in the shortest amount of time.